Most Tax-Efficient Set Up?

[Liquid validity]

Thanks LV, but that kind of thing I have quite a lot of experience with and easy access to.

No worries, its pretty basic stuff anyway as you say

 

[isatrader]

I've run my one man design business as a limited company for the last 5 years. The tax benefits outweigh the extra accountancy costs for me and the deductions that the accountants manage to claim usually cover the extra costs. Athough there is extra admin

I take a small monthly salary which is basically the annual personal tax free allowance divided by 12, and then the rest of the money is taken as dividends after corporation tax of 20%. You only pay corporation tax on your companies gross profits after taxable costs of running the business. So I'm not sure what is a taxable expense for a trading business. Computer equipment, trading software, data subscriptions, your office furniture etc maybe. If your working from home, you can claim for your utility bills that are used for your business like electricity and phone etc. But that's why you need an accountant as they know all the current deductions as they change all the time, but are worth claiming imo, if the government allows you to.

The main disadvantages is the extra admin and extra costs, but I've found personally to be better for what i do.

You said you're going to see an accountant so find out what's deductible and what's not and if possible get them to do a comparison with being self employed so that you make the right decision for you.

 

[The Leopard]

To add to LV's post, form a SSAS for the corporate entity too. Then you can transfer disparate pensions into it, make a secured loan from the SSAS to the Ltd company and use it as additional trading capital. Repay loan back to SSAS and increase value of SSAS by making payments to your pension scheme on profits generated.

e2a - you can only loan up to 50% of the pension value to the ltd company but this forces diversification and is no bad thing imo

I've run my one man design business as a limited company for the last 5 years. The tax benefits outweigh the extra accountancy costs for me and the deductions that the accountants manage to claim usually cover the extra costs. Athough there is extra admin

I take a small monthly salary which is basically the annual personal tax free allowance divided by 12, and then the rest of the money is taken as dividends after corporation tax of 20%. You only pay corporation tax on your companies gross profits after taxable costs of running the business. So I'm not sure what is a taxable expense for a trading business. Computer equipment, trading software, data subscriptions, your office furniture etc maybe. If your working from home, you can claim for your utility bills that are used for your business like electricity and phone etc. But that's why you need an accountant as they know all the current deductions as they change all the time, but are worth claiming imo, if the government allows you to.

The main disadvantages is the extra admin and extra costs, but I've found personally to be better for what i do.

You said you're going to see an accountant so find out what's deductible and what's not and if possible get them to do a comparison with being self employed so that you make the right decision for you.

Thanks Robster and ISA. I've worked in the industry in the past and am very comfortable with the things you're talking about (we've been involved in setting up limited companies and SSASs, and I've got free access to Chartered Financial Planners), and I know some regular accountants well that we've done quite a bit of business with. I was hoping someone was using slightly more exotic methods.

At present, I'm using a DMA SB mob, and I haven't got any real complaints. I just want to explore the possibilities because of course I'm paying a fairly serious premium on commissions for the SB wrapper. RT costs are roughly about 50% more than they would be with a standard futures broker. I don't do high frequency (so to speak) so this isn't the major drawback it would be if I was scalping in and out all day long, but nonetheless I want to get things as efficient as possible.

 

[R.Charnock]

If you're not doing anything that could be construed as scalping or trading on latency, TL, I think you won't have many problems using ordinary spread bet. How many tardes per day are you making?

 

[The Leopard]

If you're not doing anything that could be construed as scalping or trading on latency, TL, I think you won't have many problems using ordinary spread bet. How many tardes per day are you making?

Ordinary SB is a no-no for me. DMA SB is OK, just expensive compared to normal futures brokers.

How many per day? Well, last month it was more a case of how many per week, but on average 1 per day would be towards the upper end.

 

[scose-no-doubt]

While I'd agree with most of what both Liquid and Bobby (Robster's new hadle - let's make it stick guys!) LV the problem with this type of structure is that HMRC can challenge and attempt to class the company as a CEIC if it becomes an investment vehicle i.e. generates >% profits from stocks real estate and that sort of thing and then they make you pay main rate on everything. That takes your company outside of the scope of Entrepreneurs Relief too which is something that nobody wants - even if it's a just in case.

It's all a bit grey as I said and while it's unlikely, I've seen it happen and I've seen people taken to the f*cking cleaners over it.

There's also the issue of effective tax rates when you're drawing dividends at the higher rate and paying CT for your close company.

I think this is the reason for the whole LLP with limited partner shebang which means your chancing CGT but can possibly be beneficial if you're holding for retirement or estate purposes.

Anyway... tread carefully chaps.




PS - re Bobby's pension dealy - you can claim CT deduction on salary substitute pension contributions through a company scheme though you're better off not doing that for family/t4ke the **** salaries for people that do not add value.

 

[scose-no-doubt]

Who says Teh Scose never gives you f*ckers anything?

feel fray to PM me trading advice as a quo to teh quid pro lol. Not you Bobby. I've had enough of you sending me pics of you trading in the nude. Hairy b4stard.

 

[scose-no-doubt]

Oh and make sure your memorandum and articles of association are in order f4gs. Those sh1tty statute ones don't cut it for trading etc. Squeaky clean!

 

[The Leopard]

While I'd agree with most of what both Liquid and Bobby (Robster's new hadle - let's make it stick guys!) LV the problem with this type of structure is that HMRC can challenge and attempt to class the company as a CEIC if it becomes an investment vehicle i.e. generates >% profits from stocks real estate and that sort of thing and then they make you pay main rate on everything. That takes your company outside of the scope of Entrepreneurs Relief too which is something that nobody wants - even if it's a just in case.

Yes, we've come across this in the past.

 

[scose-no-doubt]

So tired that I've devolved from single letter spelling mistakes to creating words and writing sentences that seem to have large chunks missing. Win!

 

[scose-no-doubt]

Yes, we've come across this in the past.

I remember one poor sod who was getting raped for tax on unrealised high six figure interest on icelandic bonds that defaulted. he accepted some sh1tty restructure deal and technically, there was no loss to roll back and the capital element that lost was CGT. lulz lulz lulz lulz

 

[R.Charnock]

Ordinary SB is a no-no for me. DMA SB is OK, just expensive compared to normal futures brokers.

How many per day? Well, last month it was more a case of how many per week, but on average 1 per day would be towards the upper end.

While I can understand your reluctance to use those thieving barsteward SBs, if you're making only a tarde or two per week it could save you an awful lot of tax and/or hassle.

 

[The Leopard]

While I can understand your reluctance to use those thieving barsteward SBs, if you're making only a tarde or two per week it could save you an awful lot of tax and/or hassle.

That's what I'm doing at present - no thieving pack of fluntcaps like CMC or IG, just DMA SB sweetness.

I just want to make sure there aren't any very tax efficient ways to do it through a regular broker and cut my commissions down substantially.

 

[Liquid validity]

While I'd agree with most of what both Liquid and Bobby (Robster's new hadle - let's make it stick guys!) LV the problem with this type of structure is that HMRC can challenge and attempt to class the company as a CEIC if it becomes an investment vehicle i.e. generates >% profits from stocks real estate and that sort of thing and then they make you pay main rate on everything. That takes your company outside of the scope of Entrepreneurs Relief too which is something that nobody wants - even if it's a just in case.

It's all a bit grey as I said and while it's unlikely, I've seen it happen and I've seen people taken to the f*cking cleaners over it.

There's also the issue of effective tax rates when you're drawing dividends at the higher rate and paying CT for your close company.

I think this is the reason for the whole LLP with limited partner shebang which means your chancing CGT but can possibly be beneficial if you're holding for retirement or estate purposes.

Anyway... tread carefully chaps.




PS - re Bobby's pension dealy - you can claim CT deduction on salary substitute pension contributions through a company scheme though you're better off not doing that for family/t4ke the **** salaries for people that do not add value.

Don't shares have to be issued to have any chance of being classed as a CEIC though?
Company Law: What is the difference between shareholders and directors?
http://www.carstairsandliddell.co.u...M - TC01381 Wheels Common Investment Fund.pdf
As far as I know directors (inc. secretary) are basically employees of the ltd. co.

As far as shares go, obviously exchange or OTC count, basically any share issue.
Without any shares in issue its impossible to class it as as CEIC isn't it?
Or have HMRC classed companies as CEIC without shares in issue?
If they have thats a bit full on...
May well be wrong as I'm far from an expert with this stuff.

 

[counter_violent]

Are there any UK-based futures traders that have any particularly good ideas on ways to structure my trading activities to minimise tax implications?

I'm going to see someone about it but thought it would be nice to have a few ideas in mind before I do.

Don't worry about the tax implications at this stage. First objective should be to make a profit !

 

[robster970]

@scose - only gay accountant lovers call me Bobby.

Wait, isn't that why.........

@CV - LAZARUS!

 

[scose-no-doubt]

Don't shares have to be issued to have any chance of being classed as a CEIC though?
Company Law: What is the difference between shareholders and directors?
http://www.carstairsandliddell.co.u...M - TC01381 Wheels Common Investment Fund.pdf
As far as I know directors (inc. secretary) are basically employees of the ltd. co.

As far as shares go, obviously exchange or OTC count, basically any share issue.
Without any shares in issue its impossible to class it as as CEIC isn't it?
Or have HMRC classed companies as CEIC without shares in issue?
If they have thats a bit full on...
May well be wrong as I'm far from an expert with this stuff.

You have to have shares issued to have a company. The directors of small companies or their close relatives ususally hold the shares... or you can have other companies holding them and other such nonsense. Even if it's 1 share of £1 or whatever there still has to be issuance.

 

[Liquid validity]

You have to have shares issued to have a company. The directors of small companies or their close relatives ususally hold the shares... or you can have other companies holding them and other such nonsense. Even if it's 1 share of £1 or whatever there still has to be issuance.

Sh1t they class it as shares down to that level, I thought you meant they had to be
publicly issued, or at least in issue beyond director level.
Told you I knew f**k all about this stuff though didn't I

 

[The Leopard]

Don't worry about the tax implications at this stage. First objective should be to make a profit !

Thanks CV, that's very true. Funny, your [insert female relative] was giving me the exact same advice last night. At least, I think she was. It was a bit difficult to understand her, her mouth was full at the time.

 

[counter_violent]

Thanks CV, that's very true. Funny, your [insert female relative] was giving me the exact same advice last night. At least, I think she was. It was a bit difficult to understand her, her mouth was full at the time.

Blimy, didn't realise it was this easy to wind folks up....I could make a career of it.

)